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Faculty panel analyzes Jeffrey Sachs work and its impact

Matt Sanderson, Bruce Moon and Jack Lule (from left to right) led a compelling discussion of Jeffrey Sachs and his life's work on April 6.

On a cloudy Monday afternoon, students, their professors and university staff filled Rauch Business Center’s lecture hall to discuss the writings and deeds of this year’s commencement speaker, Jeffrey Sachs, who the New York Times described as “the most important economist in the world.”

On April 6, Bob Thornton, professor of economics and head of the Commencement Speakers Nominations Committee, introduced the panel of Lehigh professors. Scott Wojciechowski, president of the Class of 2009, moderated an engaging question-and-answer period that followed their formal remarks.

The first panelist to speak was Jack Lule, the Joseph B. McFadden Distinguished Professor of Journalism and director of the globalization and social change initiative.

As an expert in both journalism and globalization, Lule gave an overview of Sachs’ academic and public life. He described Sachs’ transition from a promising Harvard scholar to becoming economics’ equivalent of a rock star and even touring with U2’s Bono.

All the panelists praised Sachs for his acumen, as evidenced by his exceptional academic career. Most universities do not hire their students immediately after graduation, but Sachs received all three of his degrees from Harvard University and the same institution granted him full professorship at the age of 29.

“Whether people agree with him or disagree with him, you’re not going to disagree with his status as an intellectual,” Lule said.

Lule, Moon and Sanderson also spoke warmly of Sachs’ intellectual bravery. He not only supports his theories with empirical data, but he tests them in complex, large-scale problems. Sachs has given economic advice to developing countries in Latin America, Eastern Europe, Asia and Africa, and he is currently the special advisor to Ban Ki Moon, the secretary general of the United Nations. In addition, Sachs has championed unpopular causes such as calling on wealthier countries to cancel developing countries’ debts.

The panelists also lauded Sachs for broadening economic theories to incorporate the effects of factors outside the market. He now considers malaria and a country’s access to water, which Lule said are commonly ignored by economists, as contributors to poverty.

However, Moon and Sanderson contended that his theories were still too narrow, and for evidence they point to his work in post-communist countries.

“Able to dream big”

Sachs’s transformation from theorist to activist occurred in the mid-1980s, when he provided advice to the president of Bolivia, whose country was on the verge of economic collapse. Sachs urged Bolivians to practice wage control and to privatize industry, and at the same time, he encouraged developed countries to cancel Bolivia’s debt and supply monetary aid. As a result, Bolivia reduced in its skyrocketing inflation rates and avoided a financial meltdown. Sachs was considered Bolivia’s rescuer and was asked to advise other Latin American countries, which he did with similar success.

Bolstered by his accomplishments in the West, Sachs attempted to restore Polish and Russian economies in the early 1990s after the collapse of the Soviet Unions. In Eastern Europe, his methods met with very different results. Poland and Russia’s economies floundered, and Russia suffered an “unprecedented” 10-year decline in life expectancy, Moon said.

Both Moon and Sanderson faulted Sachs for ignoring the political, cultural and social forces that Eastern European countries would need in order to support capitalism.

“To nearly everyone but Sachs, the Russian experience is a cautionary tale that embanks many of the cornerstones of Sachs’ theoretical approach,” Moon said. Sachs contends that the Russian government ignored his advice and Western nations did not provide enough financial support.

Sanderson, however, believes Sachs’ theories are flawed, because they do not account for inequalities in wealth and power.
Sachs assumes that all nations originated in poverty and that some attained wealth by progressing through a series of stages, Sanderson says. Sachs considers Europe as the model of economic development and believes impoverished nations can overcome poverty by emulating it.

This approach, Sanderson said, ignores the relationship between European countries and the rest of the world. “The development in Europe,” he said, “required inequality in the rest of the world.” Britain prospered not only because it was technologically advanced and practiced trade, but also it owned colonies.

“If you ignore the fact that there is inequality in the world,” Sanderson continued, “this can lead you to unnecessarily narrow views to the causes of poverty.”

Despite criticisms, Sachs retains the same basic economic framework he employed in Bolivia. Although he has modified his theory to account for disease and geography, he still contends that a free-market economy coupled with aid can end poverty.

Sachs is actively pursuing this goal. Currently, he is the Director of Columbia University’s Earth Institute and president of the Millennium Promise Alliance, a nonprofit organization he co-founded to reduce poverty, disease and hunger by 2015. From 2002-2006 he was director of the U.N. Millennium Project and special advisor to Kofi Annan.

At the end of the question-and-answer session, a student asked the panelists what he could learn from Sachs.

“His fundamental optimism,” Moon said, referring to Sachs’ belief that humans can eradicate extreme poverty. “He does inspire people to make efforts.”

“Sachs is able to dream big,” Lule added. “As graduating seniors, this is the time for you to think big. … I think the world looks to each new generation to recreate that optimism and energy, Sachs to his credit has held on to it.”